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Health insurers to report all hikes to government

WASHINGTON — The Obama administration says it will require health insurance companies to report all price increases, no matter how small, to the federal government so officials can monitor the impact of the new health care law and insurers’ compliance with it.

Under current rules, the government requires insurers to report information on rate increases of 10 percent or more. New rules being issued by the administration will extend this requirement to all rate increases for all health plans sold to individuals, families, and small businesses — a total of about 60 million people.

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Federal health officials said they need the additional data to monitor trends in premiums as major provisions of the law take effect and more people buy insurance.

‘‘The purpose of this policy is to identify patterns that could indicate market disruption, which could occur given the additional standards that apply’’ to insurance starting next year, the administration said in a justification of the rules adopted by Kathleen Sebelius, the secretary of health and human services.

Under the new law, Sebelius said, she is supposed to ‘‘monitor premium increases of health insurance coverage’’ inside and outside the regulated state-level markets known as insurance exchanges.

Consumer advocates welcomed the new reporting requirements, saying they would enhance the ability of insurance regulators and the public to scrutinize rate increases.

Insurers object to the requirements. The federal government ‘‘is creating a hugely burdensome and expensive reporting system’’ that duplicates what most states already require, the Blue Cross and Blue Shield Association said.

The reporting requirements generally apply to rate increases sought after the beginning of next month. A fierce debate has erupted over the impact of President Obama’s health care law. Insurers and employers predict it will drive up premiums, especially for healthy people under 35. The White House disputes that prediction and says that many factors will lead to lower prices.

The law guarantees coverage for people regardless of preexisting conditions, prohibits insurers from charging women more, and limits their ability to charge higher rates to older people.

Insurers now often divide consumers into groups. Premiums are often higher and rise faster for less healthy individuals and groups.

By contrast, the new law requires insurers to pool the claim costs of all their customers when setting rates in the individual market in a state. Likewise, insurers must consider the claims histories of all their small-business customers when setting rates for them. Premiums for each product are supposed to reflect the combined experience of all products in the market.

Federal health officials said they needed to know the prices of all insurance products so they could determine whether insurers were complying with these requirements.

If an insurer wants to increase rates for any product, it ‘‘must submit a rate filing justification for all products’’ in the same market, the rule says. ‘‘Products can no longer be reviewed as completely unique,’’ but must reflect the experience of the entire market.

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